Question

"How might society solve problems associated with externalities and market failureLOADING...​?

If an externality is​ present, resulting in market​ failure, then
A. only government intervention can increase economic efficiency.
B. additional competition will reduce problems associated with market failure.
C. it is not possible to enhance the well−being of society.
D. government intervention will further reduce the well−being of society.
E. private solutions may reduce or correct market failure.

Answer 1

Society can solve problems associated with externalities and market failure through government intervention, private solutions, and increased competition.

Step-by-step explanation:

When there is an externality present, resulting in market failure, there are several ways society can address the problem. One option is government intervention, which can help increase economic efficiency. Another option is through private solutions, which may reduce or correct market failure. Additional competition can also reduce problems associated with market failure. However, it is important to consider the strengths and weaknesses of both markets and government when making judgments about economic policy.